What is Bonchon's right regarding the use of media and allocation of brand funds?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
We reserve the right to use any media, create any programs and allocate brand funds to any regions or localities in any manner we consider appropriate in our business judgment.
The allocation may include rebates to individual franchisees of some or all of their System Brand Fund contributions for local advertising expenditures if, in our judgment, our national or regional advertising program or campaign cannot effectively advertise or promote in certain regions or communities.
If we determine that the total Bonchon System Brand Fund Contributions collected from all Bonchon franchisees is insufficient to sustain a meaningful regional or national advertising campaign, we may rebate all or a portion of the Fund contributions to franchisees on a pro rata basis.
Franchisees must expend any rebate on the types of local advertising and media that we determine.
All rebate advertising expenditures must be documented to us in a monthly rebate advertising expenditure report form which we will furnish in our Manuals or otherwise.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon retains significant control over the use of media and the allocation of funds within the Bonchon System Brand Fund. Bonchon reserves the right to use any media, create any programs, and allocate brand funds to any regions or localities as it deems appropriate. This broad discretion allows Bonchon to direct advertising efforts and resources where it believes they will be most effective for the overall benefit of the brand.
Bonchon's allocation of brand funds may include rebates to individual franchisees for local advertising expenditures. This can occur if Bonchon determines that its national or regional advertising program cannot effectively promote the brand in certain regions or communities. If the total contributions to the Bonchon System Brand Fund are insufficient for a meaningful regional or national advertising campaign, Bonchon may rebate all or a portion of the fund contributions to franchisees on a pro rata basis. However, franchisees must spend any rebate on local advertising and media types that Bonchon determines, and they must document these expenditures in a monthly report.
This arrangement means that while franchisees contribute to the System Brand Fund, Bonchon has the ultimate authority on how those funds are spent. While franchisees may receive rebates for local advertising, they must adhere to Bonchon's guidelines on how those funds are used and provide documentation of their expenditures. Prospective franchisees should consider that they have limited control over the advertising strategies and fund allocation, as Bonchon prioritizes the overall benefit to the Bonchon system.